We’re starting to get the hard numbers on what the debt limit deal, which passed the House yesterday and will pass the Senate today, would mean for the US economy. It’s really not pretty.

Since only a cockeyed optimist would think that fiscal policy is going to be get better than what is dictated in this deal (more likely it will wind up worse, and instead of pivoting to jobs DC will be on auto-pilot, consumed with the debt, the new Catfood Commission and its work), I think JPMorgan’s note on the macroeconomic consequences of the trajectory of the economy is appropriate. This doesn’t mean that the debt limit deal ushered all of this in, but this is an accurate representation of the consequences over the next year of wrongheaded policy in Washington:

Impending fiscal drag for 2012 remains intact. The deal does nothing to extend the various stimulus measure which will expire next year: we continue to believe federal fiscal policy will subtract around 1.5%-points from GDP growth in 2012. It’s possible the fiscal commission could do something to extend some measure such as the one-year 2% payroll tax holiday, though we think unlikely, as it would need to be paid for, which would be tough. If anything, the debt deal may add modestly to the fiscal drag we have penciled in for next year.

Keep in mind that the latest stats show an annualized 0.8% GDP growth in the first half of the year, 0.4% in Q1 and 1.3% in Q2.

EPI has a similar analysis, looking at the $25-$30 billion of deficit reduction cemented in this bill for FY2012, and the failure to extend the two stimulative policies that expire at the end of the year. They also predict 1.5% shaved off GDP in 2012, and the unemployment numbers are eye-popping.

If Congress fails to renew these existing programs or enact improved versions, we can expect slower growth, fewer jobs, and higher unemployment. Specifically, there could be 1.8 million fewer jobs and a 0.6 percentage point increase in the unemployment rate in 2012 as a result of abandoning current budget policies. The national unemployment rate would average closer to 9% instead of trending toward 8%, as projected by the Blue Chip consensus forecast. This means little relief for the 14 million people who are currently unemployed or the many millions more who are underemployed. Roughly one in three workers will be unemployed or underemployed in 2011 and there would be little progress on this front in 2012. This persistent high unemployment not only creates great economic distress for those families directly impacted but also undermines wage growth and continues the erosion of benefits of those still employed. Moreover, these high levels of unemployment make it more difficult to face our fiscal challenges over the long run.

These are the real numbers here. And one reason why they’re so high, a point that should be highlighted more in this debate, is that the deal will not so much cut spending as shift spending onto states that can’t afford to do anything about it. As CBS News reports:

While the details of the spending cuts to states remain unclear, lawmakers from both parties have discussed the need to cut or impose caps on so-called discretionary spending over the next decade.

That could mean wide-ranging cuts in federal aid to states, affecting everything from the Head Start school readiness program, Meals on Wheels and worker training initiatives to funding for transit agencies and education grants that serve disabled children [...]

“We have the potential for disaster should there be a major realignment in federal funding that results in a cost shift to states,” said Nevada state Sen. Sheila Leslie, a Democrat from Reno who recently discussed the issue with Obama administration officials in Washington. “In short, we are teetering on the edge right now, and a cost shift could send us over the cliff.”

We talk about discretionary spending in this abstract, antiseptic terms, as if it’s somehow inferior to Medicare, Medicaid and Social Security. It’s really not. These cuts will be extremely deep, and states, constrained by balanced budget requirements, will have to pass them on in the form of additional mid-year cuts. The anti-stimulus from the states has stuck the economy in molasses. And it’s bound to get worse. More from Stateline and NYT.

Some Democrats will react to this be stressing the need to avoid default or a debt downgrade (though hilariously, JPM fully expects an S&P debt downgrade before the end of the year, and adds “we see no major implications for borrowing costs due to the actions of one or more rating agencies”). I will choose to stress the need to protect 1.8 million workers. The cries to stop this deal are only cries in the wilderness at this point.

Name another country that spends 50%+ of the revenues for killing people and buying people killing machines. The war department can’t win a damn thing except cushy jobs, pensions and war profits for the profiteers.

Who did we kill last night ? Do you feel safer because we are military nuts ?

It will be interesting to see the states run by conservatives who have been cutting the states’ incomes these last several years attempt to cope with the reduction, year after year, for the next few years, of federal dollars.

Gov Goodhair (is he related to the Donald?) brags about the jobs in Texas, but if the federal governnment downsized it’s footprint there severely, Texas would dry up and become a tumbleweed. (ok, that’s an exaggeration, but it would suffer immensely.)

For all those people that are still employed and have walked around with their heads up over all this the past 12 years, I’ve got a message for you:

Stop buying anything except the basic and only low costs foods. Forget about purchasing coffee at the coffee shop. You’re going to need every nickle because you will soon have no job and NOBODY is hiring!

Stop whining about an opportunity. Everyone has been pushing for UHC–this is the opportunity to actually get it passed into law because it saves so much money. The problem is (supposedly) money. Thus, by adopting a UHC or SP/UHC healthcare system, $50B-$100+B/month can be saved. Yes, those are realistic savings. And the bill under discussion is only asking for about $20B/month savings ($2.4T over 10 yrs = $240B/yr over 12 mo = $20B/mo). So who would *object* to saving 3x-6x as much–and WHY?

Apparently, I live in the State second least relying on federal tax dollars. In Minnesota we pay double into the Federal Government then we receive back. Our conservative “Federal Government is to big!” neighbors to the right and left of us, (geographically), apparently reap our fair share, while vigorously complaining about it! Go figure!http://www.economist.com/blogs/dailychart/2011/08/americas-fiscal-union

Isn’t this about how many jobs the stimulus “saved or created”? So after 4 years Obama’s contradictory economic policies from year to year at best result in a wash of jobs “saved or created” because of the Stimulus in one year and the Anti-Stimulus in the other year. Don’t get me wrong as I’m all for paying down debt when the economy is strong, but by no stretch of the imagination does the job pictures justify throwing fire on the unemployment flame.

This is all about extended the Obama Tax cuts and gutting Medicare , and Social Security. This President will say or do the same thing he did at the end of 2010. He will get what he call a grand bargain. Under the cover of this new legislation the so-call progressives in congress help him pass. The idea is created a crises to do what you could not do under normal situations with a little help from their crazies friends on The Right. What you fail understand .you not weak if you get the result you want. That Clown who said that this was a “sugar coated satin sandwich” should be primary too.I will paraphrase His statement. “It bad but it could be worst if I stand up to the Emperor Obama. I love Jesus but not enough to be fed to the lions.” For a great christian like himself it hard to find a Job. Emanuel Cleaver The Methodist Pastor believes he can serve two Gods(The money God, Heavenly God) especially if one of the Gods is in Heaven. Come Sunday morning this should go over real good as he prepares for his “Sermon On The Mount”.

I heard a powerful call to action last night. K.O. delivered another of his Special Comments. As usual it was timely and on the money. Where IS the outrage? There’s plenty of outrage and passion right here. What’s needed is a stucture. If FDL would at least start the ball rolling, I have every confidence that a movement could get started.

The online community has the numbers and the connections to make it happen.

Bittersweet we need to get rid of Klobuchar . I just came home from a meeting about this. Jack Palmier (sp) Nelson, Dave Wellstone, someone who will work for our values , could be convinced to replace these do nothings. Are you hearing anything at your end. We have to get going now,

I keep thinking I’m in some damned nightmare and keep hoping to wake up. Think about what just happened; a supposedly Democratic president has cornerd the Democrats in Congress into voting for the most conservative deficit reduction package in the history of this nation. Think about that. He put the Democrats in Congress on the hook for blame of default after taking the Tea-GOP off the hook. Again, think about that. The more David Dayen uncovers about this package, the more I hate it. And what’s worse, this continued destruction of the nation, destroying more jobs, and pushing more people into poverty is being done by a Democratic president.

Think about where we are in Americn history. The Democratic party has finally shed the skin of any pretense of caring about working people, the middle class, and the poor with this package. Obama stands naked before us as the most ineffective president since Herbert Hoover in dealing with a national crisis. How can this man come to us in 2012 and tell us with any conviction that he’ll “fight” to protect the middle class or entitlements, or that he’ll work to create jobs or restore economic fairness. HOW?

He can’t, and now, neither can the Democratic party. For those who think the big 3 are protected, or that new tax increases will occur, you need only need listen to the conversation all yesterday. The GOP was out on the airways crowing about their beatdown of the left, yet again. Where was Obama or the Democrats in Congress out defending their actions, nowhere to be seen. We had Valerie Jarrett on MSNBC saying she “hoped” revenues could be put back on the table, and giving no assurances the big 3 would be protected long term. What’s worse Mitch McConnell has said they now have a new model of governing from the minority.

I’ve been as tough on Obama as any progressive in the nation, but if you would’ve told me that the Democratic party would be in the place it is today, even I would’ve told you you were crazy. Not even I had predicted Obama would be this damned pathetic and weak. You couldn’t have written a fictional script this bad. But sadly, here we are. A Democratic party seemingly at its zenith in 2008 has now changed places with the party that most thought they had put on the ropes for at least a generation.

I’s almost too surrreal to believe. This president with his incessant need for compromise and bipartisanship has brought Dracula back to life, and now Dracula has gone on another bloody killing spree, with his acquiescence. Obama once said he would rather be a really good one term president, than be a mediocre two term president. Well I have news for you Mr. Obama, you’ve turned out to be a really pathetic, one term president. And if you’re lucky enough to get a second term, I expect nothing more than you’ve delivered thus far.

Jane….Progressive organizations need to try to team up with Labor and run working people candidates. IT TIME TO DROP THE DEMS…THE OLD DAYS ARE GONE. If any election WILL change things its going to be 2012……the country is in the mood for a whole new Washington. I work at the airport and talk to all kinds of people all day. Repubs are as upset about SS and Medicare as we are…and they are ready to vote against anyone who screws with it including people that they have voted for , for so many years. We can start with Congress and the US Senate. It can be done by next year.

If we hope to really start a populist progressive movement in this country it’s going to have to start here. FDL and other like minded online sites are going to have to step up. Present a structure that can be built upon.

Yes, far from being the most advanced country in the world, we are the most behind. We are still in the colonial era, spending most of our wealth on war to occupy and dominate brown people’s countries so we can help our corporations steal their natural resources and use the population as slave labor. It’s no wonder that our economy is failing, it’s obsolete. Not to mention criminal. And not just criminal against people in other countries, criminal against us. They are selling us out and reducing us to slave labor too. At least that is their goal. They’re not quite there yet. But passing this bill will help launch us into a depression and will forward their real agenda toward us tremendously. Dark days ahead. Some of us are thinking about fleeing to another country in order to have medical care, a home and be able to continue to buy groceries. Something I never would have imagined in my younger days.

You have said it very well. We cannot help Obama get a second term, nor can we allow the Tea Party to take complete control, although you could argue they already have thanks to Obama’s weakness, cowardice and general incompetence. We need to elect progressives to Congress and get a real progressive President or at least not one who is determined to out-conservative the conservatives. americanselect.org is a site for people trying to bring a third party to life. It looks pretty good. We have to fight Mordor…or there will be worse to come. Hard to imagine, but imagine another depression because I think it is unavoidable at this point.

I think you’re making the same mistake a lot of people have. Obama is neither weak nor ineffective. I am convinced his true aims are just not what people think they are. He’s admitted he wants to cut SS/M/M, and this puts him much more firmly on that path. Remember Health Insurance “Reform,” when he was just too poor a negotiator to get us any better than that POS gift to the insurance companies? Remember how it turned out he’d already made that deal (and had tossed single payer out entirely) at the same time he was negotiating so poorly?

One of the things I’m good at is spotting patterns. His pattern of “failure” is far too consistent, and with too consistent RW results to be anything but deliberate, IMO.

I’ve come to the same conclusion about TPTB in the Democratic Party, too. When they want to, they’re very good at organizing and managing recalcitrant members. Oddly, those members seem to be more liberal than not. And I don’t even want to begin on women’s issues. Remember, Stupak’s a Dem.